Fire at Swatch Workshop Causes Production Delays

MADRID — The Swatch Group, the world’s largest watchmaker, said on Monday that production of some watch components would be delayed for as long as two months after a fire destroyed one of its Swiss workshops.

Nick Hayek, the company’s chief executive, said that the damage was limited and that the production delay would have more of an impact on watchmakers that buy components from the company than on watch retailers. Mr. Hayek estimated that the overall cost of the fire, including production delays, would be 20 million to 25 million Swiss francs, or $23 million to $28 million, part of which was likely to be recouped once production returned to normal.

The fire broke out on Sunday and swept through a workshop at a factory in Grenchen, in northwestern Switzerland, that galvanizes metal components to protect them from rust. Another workshop also had some damage because of smoke from the fire. The factory is operated by ETA, a manufacturing subsidiary of Swatch. It was closed on Sunday, so nobody was hurt in the blaze.

Swatch is best known for its extended portfolio of watch brands, including Omega, Tissot and Longines and its playful plastic watches. But Swatch also produces more than half of the watch movements made in Switzerland and sells them and other inner workings through ETA and other subsidiaries to makers of some of the world’s most expensive timepieces.

“Such a fire is very rare, but when you have over 150 factories, you know that you can also have flooding and all sorts of accidents,” Mr. Hayek said by telephone.

The Swiss police are investigating the accident, but Mr. Hayek suggested that the most likely explanation was “a technical issue with a machine that could have started the fire.” Mr. Hayek said the fire had created “a big bottleneck” for galvanizing, but he added that he was confident delayed orders could be handled by some of the other workshops within the Swatch Group that specialize in the process.

A version of this article appears in print on December 31, 2013, on Page B2 of the New York edition with the headline: Fire at Swatch Workshop Causes Production Delays. Order Reprints|Today's Paper|Subscribe